Airlines, cinemas and other firms will be banned from imposing rip-off charges on credit card transactions from today. Customers who book their tickets using a credit card will no longer face the steep fees.

Under new rules, companies will only be allowed to impose surcharges that reflect the actual cost of the transaction. Hotels, car dealers and concert promoters have also been imposing excessive fees.

Many people do not know about the additional payment until they reach the end of the booking process. The travel and leisure industry alone charged customers up to £630million for card transaction fees in 2011.

New rules: The government has brought forward part of the Consumer Rights Directive to stop retailers from imposing unnecessarily card surcharges on customers.

Consumer Minister Jo Swinson said:
'The practice of excessive payment surcharges has been ripping off
consumers for far too long. They are fed up with thinking they will be
paying a certain price for goods only to find out towards the end of the
process that the final price is much higher.'

She added: 'I am delighted that the
ban will stop retailers from cashing in by charging add-on fees that
simply do not reflect the real cost of processing the payment.

'Consumers will be less likely to get
nasty surprises as they will have a clearer and more transparent
breakdown of what they are paying for.'

HOW AIRLINES PIONEERED BOOKING CHARGES

Last year budget airlines finally caved to the OFT’s demands and fell in line with the regulators demands to include admin fees in their ticket prices.

Europe’s biggest budget airline, Ryanair finally made this change in November last year and it now includes all fees in its upfront price.

The action taken by the regulator was a result of a super-complaint made by consumer group Which? in February last year.

It complained that there was a lack of transparency, with charges added towards the end of the booking process and lack of reasonable payment alternatives to avoid the charge.

In July Ryanair was one of twelve airlines that agreed with the OFT to include debit card charges in their headline prices instead of hitting customers with a separate fee the end of the transaction.

One airline, FlyBe, went a step further and scrapped fees entirely in April last year.

Richard Lloyd, from consumer campaign
group Which?, said: 'Over 50,000 people supported our campaign to end
rip-off surcharges so we're pleased the Government is
implementing this ban.

'For it to be effective there must be a
tough enforcement regime and companies must play fair and not pass
costs on to customers in other ways. We will be monitoring the ban
closely and want people to tell us about surcharges they think are
excessive.'

Britain is bringing the ban on
excessive charges in a year early ahead of an EU directive which will
outlaw the practice in 2014.

Micro-businesses and start-ups will be
exempt from the regulation until June 2014, however, giving them more
time to prepare for the ban.

But the new rules will not close the
loophole which allows airlines such as easyJet and Ryanair to impose
separate 'administration' booking fees unconnected to the use of credit
cards.

Hotels, car dealers and concert promoters have also been guilty of imposing excessive charges on customers.

Many customers do not even know about the additional fees until they reach the end of the payments process.

Ryanair was last night still
advertising administration charges of £7 each way for customers booking
flights on its website - regardless of how they paid.

Credit card transactions incurred an additional two per cent fee, unless it was booked with a special Ryanair card.

The airline recently introduced the
administration fee in response to the government signalling a crackdown
on credit card charges.

Easyjet also charges a 2.5 per cent credit card fee and an additional £10 administration levy.

The travel and leisure industry charged customers up to £630 million in 2011 in credit card transaction fees alone.

Big screen: Cinema chain Cineworld says that it abolished its booking charges last year and even introduced a 10 per cent discount for customers online.

The Office of Fair Trading estimates that customers were charged nearly £300 million by airlines alone in 2010.

Some 87 per cent of consumers object
to credit card charges while 91 per cent objected to extra charges for
debit cards, a study by the Office of Fair Trading showed.

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An end to sky-high booking fees: New rules for retailers mean 'admin' and 'payment' charges must reflect cost